Opinion
(June Term, 1844.)
Where A. gave an absolute bill of sale to B. for a horse, with a parol agreement that A. might redeem the horse, the contract was fraudulent and void as against the creditors of A.; but if A. subsequently sells the horse to B., bona fide and for a valuable consideration, before any lien of the creditors attaches, this sale is not affected by the previous fraudulent contract, but is valid against the creditors.
APPEAL from Settle, J., at Spring Term, 1844, of HENDERSON.
No counsel for plaintiffs.
Alexander Hoke for defendants.
Trover, brought to recover a horse. On the trial it was proved (252) that a man by the name of Step, being indebted to the plaintiffs, conveyed to them by a deed of sale the horse in dispute. This deed, though absolute on its face, was accompanied by a parol agreement, giving to the said Step a right to redeem the horse. The plaintiffs took possession, and while so in possession came to a new agreement with Step, as they alleged, for the absolute purchase of the horse for the sum of $100, and produced one witness to prove it. The defendant alleged and proved that the said Step was indebted to the defendant Kimzey, who had reduced his claim to a judgment before a magistrate and taken out an execution against Step, and that he had placed this execution in the hands of the other defendant, Cantrel, who was a constable, and who, by his direction, levied on the horse in dispute, and sold it as the property of the said Step. It was shown that at the time of the levy the horse was in the possession of the plaintiffs, and that it was so after the alleged purchase by the plaintiffs from the said Step. On the part of the defendants it was denied that this new contract for the absolute sale of the horse had ever taken place, and they produced as a witness Step himself to prove that he offered to let the plaintiffs have the horse for $100, which offer they declined, but they expressed a willingness to give $80, which sum Step would not take, and that no bargain was in fact made.
It was admitted by the parties that the bill of sale was, in law, fraudulent and void as to the creditors of the said Step, but the plaintiffs rested their claim to a verdict on the subsequent contract for the purchase of the horse. The defendants insisted that, as the original contract between Step and the plaintiffs was, as to the creditors of Step, fraudulent and void, the subsequent contract, if it did take place, was equally so, but they denied that any such contract had been made. His Honor instructed the jury that if the testimony of Step was believed by them, the defendants were entitled to a verdict in their favor. If, however, they believed from the evidence of the plaintiffs that the subsequent sale did take place, as they alleged, it was a valid sale, and they should give their verdict for the plaintiffs. The jury found a verdict for the plaintiffs, and, a new trial having been moved for and refused, and judgment pronounced pursuant to the verdict, the defendants appealed. (253)
We see no error in the charge of the judge. The bill of sale made by Step to the plaintiffs, being absolute on its face, was, in law, fraudulent and void as to the creditors of Step, in consequence of the private agreement for the redemption of the horse. But the parties were not forbidden to enter into a new contract for the sale of the horse, and, if made in good faith and for a valuable consideration, the new contract would not be contaminated by the fraud in the first. It could not give a legal existence to the bill of sale, but was in itself valid. Thus where securities given upon an usurious loan have been destroyed by mutual consent, a promise by the borrower to repay the money borrowed with legal interest is binding. Barnes v. Hedley, 2 Taunt., 184. If real property be sold with a view to defeat or delay or hinder the creditors of the vendor, as to them, it is fraudulent and void, but between the parties the deed is binding, and the fraudulent grantee has a title and a right to sell; and if he does alienate to a purchaser, ignorant of the fraud, for a valuable consideration, the innocent vendee will hold against the creditors of the first vendor. Martin v. Cowles, 18 N.C. 29. The principles established by the above cases show that although the bill of sale was void as against the creditors of Step, yet the subsequent contract was valid if made in good faith and before the levying of the execution by the defendant Cantrel. Such were the instructions of his Honor to the jury, in which we think there is
PER CURIAM. No error.
Cited: Shelton v. Hampton, 28 N.C. 218; King v. Trice, 38 N.C. 572; Saunders v. Lee, 101 N.C. 6.
(254)